- Lack of financial education
- Devalue of American currency
- Societal pressure to “keep up with the Joneses”
The lack of financial education in our schools creates a society that doesn’t know much about investing, retirement, and the benefits of saving. This is why most Americans leave all of the “hard work” to other “experts” like financial advisors and bankers that may or may not have their best interests in mind.
The devaluation of the dollar has forced many people to struggle to afford the basic necessities of life. Gas prices, cars, houses, clothes, and food prices are steadily increasing – and it is becoming more common for Americans to compete for labor in addition to our full-time jobs…such as part-time jobs or weekend work to keep up with the cost of living.
Everyone can see the lifestyles of the rich and famous – and wants to have their own “American dream”. But unfortunately many of us try to have this lifestyle even though we can’t afford it – which is why during the current economic recession we can see “who’s been swimming naked”. Meaning, we can see those who file for bankruptcy, foreclosure, or have their creditor repossess the leased assets for lack of payment.
How do we fix the problem? Start with the man (or woman) in the mirror – learn your credit score and history from the 3 credit bureaus Experian, Transunion, and Equifax. Live below your means and reduce as much debt as possible so that you’re able to save 8-12 months of your annual income for an emergency fund. Learn how to invest and increase your cash flow. Reduce student loans by applying for grants and scholarships – if there is still a need for loans to cover the costs of tuition…then consider starting the first 2 years at a community college if possible, go to a University within your home state, and maybe work while at college.